Calls bet agriculture fund will bounce
Mike Yamamoto | firstname.lastname@example.org
optionMONSTER's Heat Seeker system detected the purchase of 3,900 November 31 calls for $0.20. That volume dwarfed open interest of just 44 contracts in the strike at the beginning of the day, clearly indicating a new position.
DBA rose 0.41 percent yesterday to close at $29.54. Shares have fallen since hitting a recent peak of $30.87 in mid-September but seem to have found support around the $29 level.
Yesterday's trade is betting that the fund will return to its highs from October 2011 by expiration next month, a gain of roughly 6 percent from current level. If the premiums on the long calls gain before then, the trader could sell them for a profit and exit the position early.
Total option volume in the name was more than 3.5 times its daily average. Only 60 puts traded in the entire session, a reflection of the day's strongly bullish bias.